Written by Robert Thomasson III, Family Financial Counseling Student Intern, University of Kentucky, Kristen Jowers, MS, & Nichole Huff, Ph.D, CFLE
Military families are families first. Their financial well-being and quality of life intersect with food and nutrition security, housing security, and job security. Implementing effective financial risk management strategies can serve as a buffer to maintain financial security across their family’s life transitions. Service providers play a crucial role in delivering financial education that can minimize the impact of financial risks.
Identifying Financial Risks in Military Life
Military families may face financial risks from various sources:
- Income Fluctuations: Changes in duty stations or deployments can lead to variations in household income, particularly if spouses encounter employment challenges.
- Unexpected Expenses: Emergencies such as sudden relocations or home repairs can place a strain on finances.
- Fraud and Scams: Scams and fraud (i.e., natural disaster scams and voice cloning artificial intelligence) threaten the personal identity and financial well-being of military families.
Strategies for Effective Financial Risk Management
Here are five approaches and OneOp resources that service providers can use to bolster financial risk management with military families.
- Establishing Emergency Savings: Encourage families to build an emergency savings fund that covers 3-6 months of living expenses. This fund serves as a financial cushion during unforeseen circumstances.
- Securing Comprehensive Insurance: Obtain adequate insurance policies, including health, life, auto, and renters’ or homeowner’s insurance, to safeguard against potential financial losses.
- Developing Debt Management Plans: Assist in formulating plans to manage and reduce debt, and prioritizing high-interest obligations. View the on-demand webinar, Leveraging PowerPay: An Extension Tool for Debt Management to explore using a free debt repayment calculator (https://oneop.org/learn/160065/).
- Supporting Spouse Employment: Provide resources and support for military spouses seeking employment, such as career counseling and information on remote work opportunities. View the on-demand webinar, Empowering Military Spouses to Maintain Employment: A Review of the Resources for Holistic Support (https://oneop.org/learn/160063/).
- Planning for Financial Transitions: Offer guidance on financial planning for transitions, including understanding benefits and budgeting for life transitions. Take the course, Foundations for Military Family Financial Readiness, to learn the financial implications of five major service transitions (https://oneop.org/learn/financial-readiness/)
By implementing these strategies and utilizing available resources, service providers can empower families to navigate financial challenges effectively, ensuring long-term stability and resilience.
References
- OneOp. (2022, October 18). Financial risk management for military families [webinar]. https://oneop.org/learn/129671/
- Office of Financial Readiness. (n.d.) Insurance resources. https://finred.usalearning.gov/Planning#Insurance
Photo by FON’s Fasai / Adobe Stock
